As ERT journalists continued to defy the shutdown on Wednesday with a live web feed from the occupied studios at the broadcaster's headquarters in Athens, draft legislation was unveiled to launch a replacement service, but not until the end of August.

Simos Kedikoglou, a government spokesman, said the proposed slimmed down state broadcaster would run on just 1,200 employees.

"We tried during the past year to find a way of overhauling public television but it wasn't possible to change anything," Kedigolou added.

A journalist inside ERT's radio HQ who has just returned from a succession of meetings with the leaders of the centre and left-of-centre Greek government coalition partners told the Guardian they are trying to draft fresh legislation which could offer the prime minister, Antonis Samaras, a face-saving compromise that will keep the broadcaster on air.

Anastasia Zigou, a member of Strike Struggle, a group formed by ERT journalists in November 2011, said: "Many of us haven't slept for 48 hours, but we won't give in. We are sustained by the huge response we've had from citizens, not only here but at local radio stations all over the country."

She said she believed the decree to close ERT may be a bid by Samaras to bring about early elections as his New Democracy party has been doing well in the polls. It is also a quick way of fulfilling the International Monetary Fund, European Union and European Central Bank's demands that public sector staff numbers be shrunk by 2,000 by the end of the summer.

Zigou said the closure of ERT's radio stations would have a particular impact on the Greek islands.

"There have been people in tears at local radio stations in border regions – in Crete, in Samos, in Thrace. In those areas, ERT was the only Greek language radio you could hear, and the signals of other TV stations are weak too," she added.

"Without ERT they feel cut off from the metropolis. But it's much more than that, more than the firing of 2,600 workers. The sudden, undemocratic closure of a public broadcaster was a kind of coup. This isn't a private station that someone can just decided to close. This doesn't happen in democratic countries."

Zigou continued: "We need solidarity from around the world, not just from fellow journalists and unions but from ordinary citizens. This matters to everyone."

The decree to shut ERT, citing the need to cut the "incredible waste" at the broadcaster, has been condemned by Greek opposition politicians, sparking calls for a general strike and widespread international criticism.

Leftwing opposition leader Alexis Tsipras, who met the Greek president Karolos Papoulias to discuss the ERT crisis on Wednesday, issued a statement calling the decision an "institutional coup", saying "we are all obliged to resist it".

He asked the president to intervene and initiate a debate in parliament on Wednesday afternoon.

Greece's two largest unions have called a 24-hour general strike for Thursday to protest against the government's move that has shocked the public and triggered a political crisis.

The government said it tried in vain to negotiate a new deal with unions representing ERT staff with a voluntary redundancy and early retirement scheme and had no other choice.

ERT started radio broadcasts in the 1930s and launched a TV service in the mid-1960s. Though it was widely regarded as reflecting government positions – it had a channel run by the military during the 1967-74 dictatorship – the broadcaster was also valued for showcasing regional and cultural content and for covering major sporting events such as the football World Cup and the Olympics.

The broadcaster is largely state-funded, with every Greek household paying a €51 (£43) fee through its electricity bills whether they have a TV set or not. There are also several commercial broadcasters in Greece, including Mega and Sky.

The decision to close ERT was announced on Tuesday during an inspection in Athens by officials from Greece's bailout creditors.

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